Sollie Stols | Understanding the impact of IFRS 17 on insurers and brokers

With over 46 years in the insurance industry, I’ve seen many changes, from underwriting shifts to regulatory evolution. But few have matched the scale and complexity of IFRS 17.

Introduced to bring greater transparency and comparability in financial reporting across insurers globally, IFRS 17 represents more than just an accounting shift; it’s a strategic transformation. While much of the attention has focused on large insurers, brokers, UMAs, and smaller players must also take note. The ripple effects are real, and no one in the value chain is unaffected.

 What Is IFRS 17 and Why Does It Matter?

IFRS 17 (International Financial Reporting Standard 17) replaces IFRS 4 and brings a unified framework for insurance contract accounting. The aim is to give stakeholders a clearer view of an insurer’s financial health by aligning revenue recognition more closely with the economic reality of contracts.

In simple terms, it changes:

• How insurers measure revenue,
• When they recognise profits or losses, and
• How they disclose contract obligations and risk.

This shift improves transparency but also increases complexity, especially in the areas of actuarial modelling, data collection, and systems integration.

The Real-World Implications

For Insurers & Underwriting Managers:

Data is everything. IFRS 17 requires detailed tracking of cash flows, risk adjustments, and contract groupings, often down to a granular level.
Actuarial and finance teams must work more closely than ever. The line between technical underwriting and financial reporting is becoming increasingly blurred.
Profit recognition is now spread over the life of a contract. This changes how performance is evaluated and may alter incentive structures, reinsurance strategies, and pricing models.

For Smaller Brokers:

While brokers aren’t directly responsible for IFRS 17 compliance, the impact flows downstream: UMAs and insurers may revise binder agreements or reporting requirements. Expect more rigorous data requests and performance evaluations. Commission models and fee structures may come under review.

For brokers who operate with close insurer ties or under delegated authority, it’s essential to understand how their reporting and operational models might need to adapt.

 What Smaller Players Should Be Doing Now

 1. Stay Informed

You don’t need to become an accounting expert, but understanding the basics of IFRS 17 will help you ask the right questions and make better business decisions.

 2. Collaborate with Your Insurer Partners

Speak to your binder holders and insurers about how they’re adapting. Understand what they need from you and what new metrics they may be tracking.

3. Review Your Agreements

Changes in how profitability is recognised could affect binder, outsource, or commission structures. If your agreements haven’t been updated in light of IFRS 17, now is the time to initiate those conversations.

4. Embrace a Culture of Data

Even if you’re a small brokerage, building habits around good data hygiene, accurate record-keeping, and client transparency will set you apart. IFRS 17 rewards those who know their business well and penalises those who rely on patchy systems.

The Bigger Picture: Aligning with Global Best Practice

As someone who has conducted compliance audits and performance reviews across a wide range of businesses, I see IFRS 17 not as a burden but as an opportunity. It encourages all of us, from reinsurers to brokers, to operate with greater discipline, clearer reporting, and stronger alignment between risk and reward.

For too long, the insurance sector has been perceived as opaque and difficult to interpret. IFRS 17 changes that. It challenges us to rise to a new standard, one where performance is transparent, contracts are accountable, and stakeholders can compare with confidence.

Final Thoughts: Wisdom in Change

Change is never easy, especially when it’s technical, resource-heavy, and regulatory. But as someone who’s witnessed many waves of industry transformation, I can confidently say: those who adapt early are the ones who thrive.

Whether you’re running a small brokerage or leading a technical team, now is the time to ask:

• Are we aligned?
• Are we ready?
• Are we staying relevant in an evolving regulatory environment?

The answer doesn’t need to be perfect, but it should be intentional.

In today’s insurance landscape, compliance is no longer a checkbox. It’s a competitive advantage.

*Sollie Stols is the Head of Risk Management at Quicksure Pty Ltd, and also heads his private consultancy, Sollie Stols Insurance & Risk Consultants.